It was a strong week for the overall market with the S&P 500 ($SPX) (SPY) closing up over 3% on the week. The Dow Jones Industrials Index ($DOWI) (DIA) was up 3.22% for the week while the Nasdaq 100 Index ($IUXX) (QQQ) was +3.23%.
For tech stocks, Tesla (TSLA) led the charge up over 5%. The Fed raised rates as expected, which helped fuel the rally upwards. The final straw that snapped the bears last week was PCE coming in softer than expected, propelling a rally Friday morning.
This upcoming week has plenty of things to look forward to though as we enter the busy part of the monthly News cycle. More inflation data is due, as well as many of the March monthly numbers such as Non-farm payrolls and JOLTS, and ADP. This is all overlaid against the fact that April starts both a new month and a new quarter. Without further ado here are Five things to watch this week:
Manufacturing PMI
Out Monday at 10 am EST is the Manufacturing PMI as well as the Manufacturing prices index. As it has in the past this could continue to hold significance until we exit the inflationary cycle that we are in. ISM PMI is typically regarded as the report that has the largest impact on the market, but with all of the focus on prices by the consumer lately, the ISM prices report may be the market mover. Watching how these come out could also lead to further clues about further Fed plans.
JOLTS Job Openings
In line with the prices paid is the amount of jobs currently open on the market. The Fed has, by its own admission, been attempting to cool off the US economy and one way they have been attempting that is through slowing down the Jobs market. Watching how the market reacts to this when it comes out at 10 am eastern on Tuesday could also give clues about if people are working, if people are hiring, and about the potential general condition of the workforce.
ADP Employment Change
On Wednesday ADP Non-Farm employment comes out, and this is a precursor to the Nonfarm that comes out on Friday. As of late, there has been no consistent trend with some months beating expectations and some months missing. This has the potential to be a ”bad news is good news” situation for if it comes in hot then more tightening may be on the horizon and the markets may react poorly to that.
Services PMI
The US being a mostly service-driven economy at this point, watching this report at 10 am EST on Thursday will show us if the industry is expanding or contracting. As has been the case for months now there may be no “good” outcome for these reports. If the report comes in higher than expected it means the economy is still growing, which could be bad for the Fed. If the report comes in weaker it means the economy is contracting and that's just bad for the economy. Watching market reaction for an impulse move and then direction could give clues as to how people are digesting the news.
Non-Farm Payrolls
Finally to close out the week we have NFP. Coming in on Friday at 8:30 Eastern these results often move the markets. They have been consistently beating estimates only to be revised down the following month, so initial reactions may be deceiving. Unfortunately for this report reading through some of the prior revisions may be necessary to gain a full understanding of its total impact on the market in the longer term.
Best of luck this week and don’t forget to check out my daily options article.
On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
